Spok Reports 2018 First Quarter Operating Results; Software Revenue and Wireless Trends Improve
Apr 25, 2018 4:10 PM
Board Declares Regular Quarterly Dividend
2018 First Quarter Results:
Consolidated revenue for the first quarter of 2018 under Generally
Accepted Accounting Principles (“GAAP”) was
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(Dollars in thousands) |
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Change(2) |
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Wireless revenue |
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Paging revenue | $ | 23,308 | $ | 23,308 | $ | 24,972 | (6.7 |
)% |
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Product and other revenue | 961 | 961 | 888 | 8.2 | % | |||||||
Total wireless revenue | $ | 24,269 | $ | 24,269 | $ | 25,860 | (6.2 |
)% |
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Software revenue | ||||||||||||
Operations revenue | $ | 9,471 | $ | 8,189 | $ | 6,041 | 35.6 | % | ||||
Maintenance revenue | 9,374 | 9,999 | 9,543 | 4.8 | % | |||||||
Total software revenue | 18,845 | 18,188 | 15,584 | 16.7 | % | |||||||
Total revenue | $ | 43,114 | $ | 42,457 | $ | 41,444 | 2.4 | % | ||||
(1) Adjusted to exclude the adoption of ASC 606. |
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GAAP net income for the first quarter of 2018 was
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(Dollars in thousands) |
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Net income | $ | 511 | $ | 309 | $ | 854 | |||
Net income per share | $ | 0.03 | $ | 0.02 | $ | 0.04 | |||
EBITDA | $ | 3,463 | $ | 3,250 | $ | 4,605 | |||
(1) Adjusted to exclude the adoption of ASC 606. |
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Other key results and highlights for the first quarter of 2018 included:
-
Software bookings of
$18.1 million , compared to$19.8 million in the prior year quarter. First quarter 2018 bookings included$7.1 million of operations bookings and$11.0 million of maintenance renewals, compared to$9.5 million of operations bookings and$10.3 million of maintenance renewals in the first quarter of 2017. -
Software backlog totaled
$35.9 million atMarch 31, 2018 , or$42.7 million adjusted to exclude the adoption of ASC 606, compared to$40.6 million in the year earlier period. As a result of the adoption of ASC 606 approximately$5.3 million of backlog, that could have been recognized in 2018 under prior accounting rules, was re-cast to retained earnings as part of the beginning balance as ofJanuary 1, 2018 . - The revenue renewal rate for software maintenance in the first quarter of 2018 was greater than 99 percent.
-
Paging units in service at
March 31, 2018 totaled 1,030,000, compared to 1,091,000 at the end of the prior year period. - The quarterly rate of wireless revenue erosion was 1.3 percent in the first quarter of 2018 versus 2.5 percent in the year-earlier quarter.
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Consolidated operating expenses (excluding depreciation, amortization
and accretion) totaled
$39.7 million in the first quarter of 2018, compared to$36.8 million in the year-earlier quarter. -
Capital returned to stockholders in the first quarter of 2018 totaled
$4.7 million , in the form of$2.8 million from the regular quarterly dividend and$1.9 million of share repurchases. -
The Company’s cash balance at
March 31, 2018 was$101.3 million , compared to$118.9 million atMarch 31, 2017 , and$107.2 million atDecember 31, 2017 .
Management Commentary:
“We are encouraged with our performance in the first quarter of 2018 and
believe that it provides a solid base for the remainder of the year,”
said
Business Outlook:
For the full-year 2018, adjusted to exclude the adoption of ASC 606, the
Company continues to expect total revenue to range from
2018 First Quarter Call and Replay:
The Company plans to host a conference call for investors to discuss its
2018 first quarter results at
About Spok
Spok is a trademark of
Safe Harbor Statement under the Private Securities Litigation Reform
Act: Statements contained herein or in prior press releases which
are not historical fact, such as statements regarding Spok’s future
operating and financial performance, are forward-looking statements for
purposes of the safe harbor provisions under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve
risks and uncertainties that may cause Spok’s actual results to be
materially different from the future results expressed or implied by
such forward-looking statements. Factors that could cause actual results
to differ materially from those expectations include, but are not
limited to, declining demand for paging products and services, continued
demand for our software products and services, our ability to develop
additional software solutions for our customers and manage our
development as a global organization, the ability to manage operating
expenses, future capital needs, competitive pricing pressures,
competition from both traditional paging services and other wireless
communications services, competition from other software providers,
government regulation, reliance upon third-party providers for certain
equipment and services, unauthorized breaches or failures in
cybersecurity measures adopted by us and/or included in our products and
services, as well as other risks described from time to time in our
periodic reports and other filings with the
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a) | ||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) | ||||||||
For the three months ended | ||||||||
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Revenue: | ||||||||
Wireless | $ | 24,269 | $ | 25,860 | ||||
Software | 18,845 | 15,584 | ||||||
Total revenue | 43,114 | 41,444 | ||||||
Operating expenses: | ||||||||
Cost of revenue | 7,712 | 7,036 | ||||||
Research and development | 5,735 | 4,105 | ||||||
Service, rental and maintenance | 7,750 | 8,066 | ||||||
Selling and marketing | 6,490 | 5,922 | ||||||
General and administrative | 11,964 | 11,710 | ||||||
Depreciation, amortization and accretion | 2,713 | 3,223 | ||||||
Total operating expenses | 42,364 | 40,062 | ||||||
% of total revenue | 98.3 | % | 96.7 | % | ||||
Operating income | 750 | 1,382 | ||||||
% of total revenue | 0 | 3.3 | % | |||||
Interest income | 283 | 122 | ||||||
Other expense | (47 | ) | (30 | ) | ||||
Income before income tax expense | 986 | 1,474 | ||||||
Income tax expense | (475 | ) | (620 | ) | ||||
Net income | $ | 511 | $ | 854 | ||||
Basic and diluted net income per common share | $ | 0.03 | $ | 0.04 | ||||
Basic and diluted weighted average common shares outstanding | 20,027,800 | 20,530,739 | ||||||
Diluted weighted average common shares outstanding | 20,153,291 | 20,585,452 | ||||||
Key statistics: | ||||||||
Units in service | 1,030 | 1,091 | ||||||
Average revenue per unit (ARPU) | $ | 7.47 | $ | 7.56 | ||||
Bookings | $ | 18,124 | $ | 19,788 | ||||
Backlog | $ | 35,930 | $ | 40,555 | ||||
(a) Slight variations in totals are due to rounding. | ||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Revenue: | ||||||||||||||||||||||||||||||||
Wireless | $ | 24,269 | $ | 24,579 | $ | 25,110 | $ | 25,639 | $ | 25,860 | $ | 26,535 | $ | 27,024 | $ | 27,859 | ||||||||||||||||
Software | 18,845 | 19,191 | 18,526 | 16,686 | 15,584 | 17,649 | 18,331 | 16,776 | ||||||||||||||||||||||||
Total revenue | 43,114 | 43,770 | 43,636 | 42,325 | 41,444 | 44,184 | 45,355 | 44,635 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Cost of revenue | 7,712 | 7,122 | 7,069 | 7,190 | 7,036 | 7,482 | 7,639 | 7,513 | ||||||||||||||||||||||||
Research and development | 5,735 | 4,934 | 5,001 | 4,662 | 4,105 | 3,702 | 3,645 | 3,211 | ||||||||||||||||||||||||
Service, rental and maintenance | 7,750 | 7,617 | 7,875 | 7,944 | 8,066 | 7,989 | 8,253 | 8,188 | ||||||||||||||||||||||||
Selling and marketing | 6,490 | 6,039 | 5,533 | 5,329 | 5,922 | 5,855 | 5,955 | 6,429 | ||||||||||||||||||||||||
General and administrative | 11,964 | 11,695 | 12,058 | 11,939 | 11,710 | 11,277 | 10,605 | 10,439 | ||||||||||||||||||||||||
Depreciation, amortization and accretion | 2,713 | 2,774 | 2,775 | 2,851 | 3,223 | 3,176 | 3,229 | 3,235 | ||||||||||||||||||||||||
Total operating expenses | 42,364 | 40,181 | 40,311 | 39,915 | 40,062 | 39,481 | 39,326 | 39,015 | ||||||||||||||||||||||||
% of total revenue | 98.3 | % | 91.8 | % | 92.4 | % | 94.3 | % | 96.7 | % | 89.4 | % | 86.7 | % | 87.4 | % | ||||||||||||||||
Operating income | 750 | 3,589 | 3,325 | 2,410 | 1,382 | 4,703 | 6,029 | 5,620 | ||||||||||||||||||||||||
% of total revenue | 1.7 | % | 8.2 | % | 7.6 | % | 5.7 | % | 3.3 | % | 10.6 | % | 13.3 | % | 12.6 | % | ||||||||||||||||
Interest income, net | 283 | 229 | 214 | 154 | 122 | 99 | 67 | 61 | ||||||||||||||||||||||||
Other expense, net | (47 | ) | (282 | ) | 359 | 89 | (30 | ) | 100 | 85 | 104 | |||||||||||||||||||||
Income before income tax expense | 986 | 3,536 | 3,898 | 2,653 | 1,474 | 4,902 | 6,181 | 5,785 | ||||||||||||||||||||||||
Income tax expense | (475 | ) | (24,920 | ) | (171 | ) | (1,155 | ) | (620 | ) | (1,876 | ) | (2,123 | ) | (2,334 | ) | ||||||||||||||||
Net income (loss) | $ | 511 | $ | (21,384 | ) | $ | 3,727 | $ | 1,498 | $ | 854 | $ | 3,026 | $ | 4,058 | $ | 3,451 | |||||||||||||||
Basic and diluted net income (loss) per common share | $ | 0.03 | $ | (1.07 | ) | $ | 0.19 | $ | 0.07 | $ | 0.04 | $ | 0.15 | $ | 0.20 | $ | 0.17 | |||||||||||||||
Basic weighted average common shares outstanding | 20,027,800 | 19,987,763 | 19,977,263 | 20,353,801 | 20,530,739 | 20,529,958 | 20,541,275 | 20,568,058 | ||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 20,153,291 | 20,008,321 | 20,366,102 | 20,585,542 | 20,529,958 | 20,541,275 | 20,568,058 | 20,706,082 | ||||||||||||||||||||||||
Key statistics: | ||||||||||||||||||||||||||||||||
Units in service | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | 1,111 | 1,124 | 1,144 | ||||||||||||||||||||||||
Average revenue per unit (ARPU) | $ | 7.47 | $ | 7.46 | $ | 7.48 | $ | 7.52 | $ | 7.56 | $ | 7.59 | $ | 7.63 | $ | 7.71 | ||||||||||||||||
Bookings | $ | 18,124 | $ | 19,190 | $ | 18,327 | $ | 20,405 | $ | 19,788 | $ | 20,025 | $ | 18,659 | $ | 20,063 | ||||||||||||||||
Backlog | $ | 35,930 | $ | 42,305 | $ | 46,900 | $ | 43,455 | $ | 40,555 | $ | 38,295 | $ | 38,812 | $ | 39,475 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS (a) | ||||||||
(In thousands) | ||||||||
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(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 101,302 | $ | 107,157 | ||||
Accounts receivable, net | 37,068 | 32,279 | ||||||
Prepaid expenses and other | 7,789 | 5,752 | ||||||
Inventory | 1,649 | 1,672 | ||||||
Total current assets | 147,808 | 146,860 | ||||||
Non-current assets: | ||||||||
Property and equipment, net | 12,622 | 13,399 | ||||||
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133,031 | 133,031 | ||||||
Intangible assets, net | 7,292 | 7,917 | ||||||
Deferred income tax assets | 45,593 | 47,679 | ||||||
Other non-current assets | 1,522 | 1,675 | ||||||
Total non-current assets | 200,060 | 203,701 | ||||||
Total assets | $ | 347,868 | $ | 350,561 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,049 | $ | 1,305 | ||||
Accrued compensation and benefits | 9,177 | 11,018 | ||||||
Accrued taxes | 2,097 | 2,547 | ||||||
Deferred revenue | 30,590 | 31,414 | ||||||
Other current liabilities | 4,455 | 4,610 | ||||||
Total current liabilities | 47,368 | 50,894 | ||||||
Non-current liabilities: | ||||||||
Deferred revenue | 964 | 1,063 | ||||||
Other long-term liabilities | 8,282 | 8,075 | ||||||
Total non-current liabilities | 9,246 | 9,138 | ||||||
Total liabilities | 56,614 | 60,032 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock | — | — | ||||||
Common stock | 2 | 2 | ||||||
Additional paid-in capital | 98,233 | 99,819 | ||||||
Accumulated other comprehensive loss | (1,508 | ) | (1,088 | ) | ||||
Retained earnings | 194,527 | 191,796 | ||||||
Total stockholders' equity | 291,254 | 290,529 | ||||||
Total liabilities and stockholders' equity | $ | 347,868 | $ | 350,561 | ||||
(a) Slight variations in totals are due to rounding. | ||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a) | ||||||||
(Unaudited and in thousands) | ||||||||
Three months ended | ||||||||
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Cash flows provided by operating activities: | ||||||||
Net income | $ | 511 | $ | 854 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, amortization and accretion | 2,713 | 3,223 | ||||||
Deferred income tax expense | 475 | 279 | ||||||
Stock based compensation | 1,234 | 955 | ||||||
Provisions for doubtful accounts, service credits and other | 628 | 223 | ||||||
Adjustments of non-cash transaction taxes | (53 | ) | (122 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (4,106 | ) | (636 | ) | ||||
Prepaid expenses, intangible assets and other assets | (1,202 | ) | (146 | ) | ||||
Accounts payable, accrued liabilities and other |
(2,412 |
) | (2,477 | ) | ||||
Deferred revenue | 3,336 | 1,515 | ||||||
Net cash provided by operating activities |
1,124 |
3,668 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment, net of proceeds from disposals of property and equipment | (1,164 | ) | (2,851 | ) | ||||
Net cash used in investing activities | (1,164 | ) | (2,851 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash distributions to stockholders | (2,740 | ) | (7,694 | ) | ||||
Purchase of common stock for tax withholding on vested equity awards | (892 | ) | — | |||||
Purchase of common stock (including commissions), net of proceeds from issuance of common stock | (1,927 | ) | 4 | |||||
Net cash used in financing activities | (5,559 | ) | (7,690 | ) | ||||
Effect of exchange rate on cash | (256 | ) | 4 | |||||
Net decrease in cash and cash equivalents |
(5,855 |
) | (6,869 | ) | ||||
Cash and cash equivalents, beginning of period |
107,157 |
125,816 | ||||||
Cash and cash equivalents, end of period | $ | 101,302 | $ | 118,947 | ||||
Supplemental disclosure: | ||||||||
Income taxes paid | $ | 50 | $ | 180 | ||||
(a) Slight variations in totals are due to rounding. | ||||||||
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CONSOLIDATED REVENUE | ||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | ||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||
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Revenue | ||||||||||||||||||||||||
Paging | $ | 23,308 | $ | 23,624 | $ | 24,128 | $ | 24,572 | $ | 24,972 | $ | 25,441 | $ | 25,944 | $ | 26,564 | ||||||||
Non-paging | 961 | 955 | 982 | 1,067 | 888 | 1,094 | 1,080 | 1,295 | ||||||||||||||||
Total wireless revenue | $ | 24,269 | $ | 24,579 | $ | 25,110 | $ | 25,639 | $ | 25,860 | $ | 26,535 | $ | 27,024 | $ | 27,859 | ||||||||
Subscription | 420 | 559 | 577 | 623 | 543 | 551 | 560 | 503 | ||||||||||||||||
License | 3,956 | 2,431 | 1,995 | 1,641 | 1,171 | 1,594 | 1,842 | 1,691 | ||||||||||||||||
Services | 4,071 | 5,437 | 5,189 | 3,650 | 3,354 | 4,500 | 5,578 | 4,202 | ||||||||||||||||
Equipment | 1,024 | 945 | 1,102 | 1,127 | 973 | 1,402 | 1,091 | 1,250 | ||||||||||||||||
Operations revenue | $ | 9,471 | $ | 9,372 | $ | 8,863 | $ | 7,041 | $ | 6,041 | $ | 8,047 | $ | 9,071 | $ | 7,646 | ||||||||
Maintenance revenue | $ | 9,374 | $ | 9,819 | $ | 9,663 | $ | 9,645 | $ | 9,543 | $ | 9,602 | $ | 9,260 | $ | 9,130 | ||||||||
Total software revenue | $ | 18,845 | $ | 19,191 | $ | 18,526 | $ | 16,686 | $ | 15,584 | $ | 17,649 | $ | 18,331 | $ | 16,776 | ||||||||
Total revenue | $ | 43,114 | $ | 43,770 | $ | 43,636 | $ | 42,325 | $ | 41,444 | $ | 44,184 | $ | 45,355 | $ | 44,635 | ||||||||
(a) Slight variations in totals are due to rounding. |
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CONSOLIDATED OPERATING EXPENSES | ||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | ||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||
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Cost of revenue | ||||||||||||||||||||||||||
Payroll and related | $ | 4,874 | $ | 4,374 | $ | 4,330 | $ | 4,613 | $ | 4,490 | $ | 4,611 | $ | 4,469 | $ | 4,404 | ||||||||||
Cost of sales | 2,309 | 1,990 | 2,228 | 1,904 | 1,995 | 2,415 | 2,587 | 2,323 | ||||||||||||||||||
Stock based compensation | 55 | 58 | 4 | 60 | 58 | (108 | ) | 57 | 58 | |||||||||||||||||
Other | 474 | 700 | 507 | 613 |
493 |
564 | 526 | 728 | ||||||||||||||||||
Total cost of revenue | 7,712 | 7,122 | 7,069 | 7,190 | 7,036 | 7,482 | 7,639 | 7,513 | ||||||||||||||||||
Research and development | ||||||||||||||||||||||||||
Payroll and related | 4,002 | 3,521 | 4,005 | 3,807 | 3,405 | 3,195 | 2,939 | 2,505 | ||||||||||||||||||
Outside services | 1,513 | 1,361 | 849 | 659 | 516 | 511 | 569 | 580 | ||||||||||||||||||
Stock based compensation | 71 | (71 | ) | 43 | 65 | 55 | (82 | ) | 46 | 48 | ||||||||||||||||
Other | 149 | 123 | 104 | 131 | 129 | 78 | 91 | 78 | ||||||||||||||||||
Total research and development | 5,735 | 4,934 | 5,001 | 4,662 | 4,105 | 3,702 | 3,645 | 3,211 | ||||||||||||||||||
Service, rental and maintenance | ||||||||||||||||||||||||||
Payroll and related | 2,693 | 2,413 | 2,582 | 2,607 | 2,665 | 2,687 | 2,638 | 2,644 | ||||||||||||||||||
Site rent | 3,496 | 3,471 | 3,534 | 3,604 | 3,620 | 3,618 | 3,626 | 3,668 | ||||||||||||||||||
Telecommunications | 898 | 979 | 1,060 | 1,001 | 1,081 | 1,096 | 1,162 | 1,127 | ||||||||||||||||||
Stock based compensation | 24 | 20 | 20 | 20 | 20 | (29 | ) | 15 | 15 | |||||||||||||||||
Other | 639 | 734 | 679 | 712 | 680 | 617 | 812 | 734 | ||||||||||||||||||
Total service, rental and maintenance | 7,750 | 7,617 | 7,875 | 7,944 | 8,066 | 7,989 | 8,253 | 8,188 | ||||||||||||||||||
Selling and marketing | ||||||||||||||||||||||||||
Payroll and related | 3,294 | 2,573 | 3,113 | 3,039 | 3,071 | 3,556 | 3,467 | 3,489 | ||||||||||||||||||
Commissions | 1,774 | 1,634 | 1,234 | 1,121 | 1,202 | 1,248 | 1,317 | 1,559 | ||||||||||||||||||
Stock based compensation | 135 | 93 | 84 | 99 | 101 | (131 | ) | 75 | 75 | |||||||||||||||||
Other | 1,287 | 1,739 | 1,102 | 1,070 | 1,548 | 1,182 | 1,096 | 1,306 | ||||||||||||||||||
Total selling and marketing | 6,490 | 6,039 | 5,533 | 5,329 | 5,922 | 5,855 | 5,955 | 6,429 | ||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Payroll and related | 4,416 | 3,649 | 4,569 | 4,420 | 4,439 | 4,426 | 4,076 | 4,249 | ||||||||||||||||||
Stock based compensation | 949 | 774 | 711 | 755 | 722 | (863 | ) | 507 | 534 | |||||||||||||||||
Bad debt | 528 | 143 | 184 | 107 | 94 | 137 | 97 | 104 | ||||||||||||||||||
Facility rent and costs | 1,941 | 1,865 | 2,013 | 1,995 | 1,838 | 1,694 | 1,673 | 1,609 | ||||||||||||||||||
Outside services | 2,122 | 2,924 | 2,351 | 2,507 | 2,627 | 2,430 | 2,247 | 2,067 | ||||||||||||||||||
Taxes, licenses and permits | 1,080 | 1,120 | 1,077 | 1,034 | 989 | 976 | 1,164 | 1,060 | ||||||||||||||||||
Other | 928 | 1,220 | 1,153 | 1,121 | 1,001 | 2,477 | 841 | 816 | ||||||||||||||||||
Total general and administrative | 11,964 | 11,695 | 12,058 | 11,939 | 11,710 | 11,277 | 10,605 | 10,439 | ||||||||||||||||||
Depreciation, amortization and accretion | 2,713 | 2,774 | 2,775 | 2,851 | 3,223 | 3,176 | 3,229 | 3,235 | ||||||||||||||||||
Operating expenses | $ | 42,364 | $ | 40,181 | $ | 40,311 | $ | 39,915 | $ | 40,062 | $ | 39,481 | $ | 39,326 | $ | 39,015 | ||||||||||
Capital expenditures | $ | 1,164 | $ | 2,179 | $ | 1,816 | $ | 2,353 | $ | 2,851 | $ | 1,878 | $ | 1,396 | $ | 1,537 | ||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||
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UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN | ||||||||||||||||||||||||||||||||
AND AVERAGE REVENUE PER UNIT (ARPU) (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Paging units in service |
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Beginning units in service (000's) | 1,049 | 1,063 | 1,086 | 1,091 | 1,111 | 1,124 | 1,144 | 1,153 | ||||||||||||||||||||||||
Gross placements | 25 | 26 | 30 | 42 | 28 | 36 | 34 | 39 | ||||||||||||||||||||||||
Gross disconnects | (44 | ) | (40 | ) | (53 | ) | (47 | ) | (48 | ) | (49 | ) | (54 | ) | (48 | ) | ||||||||||||||||
Net change | (19 | ) | (14 | ) | (23 | ) | (5 | ) | (20 | ) | (13 | ) | (20 | ) | (9 | ) | ||||||||||||||||
Ending units in service | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | 1,111 | 1,124 | 1,144 | ||||||||||||||||||||||||
End of period units in service % of total (b) | ||||||||||||||||||||||||||||||||
Healthcare | 81.1 | % | 80.7 | % | 80.4 | % | 80.4 | % | 79.7 | % | 79.3 | % | 78.6 | % | 78.2 | % | ||||||||||||||||
Government | 5.9 | % | 6.0 | % | 6.1 | % | 6.3 | % | 6.4 | % | 6.5 | % | 6.7 | % | 6.8 | % | ||||||||||||||||
Large enterprise | 6.0 | % | 6.0 | % | 6.0 | % | 6.1 | % | 6.1 | % | 6.2 | % | 6.5 | % | 6.6 | % | ||||||||||||||||
Other(b) | 7.0 | % | 7.2 | % | 7.4 | % | 7.3 | % | 7.7 | % | 8.0 | % | 8.2 | % | 8.3 | % | ||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Account size ending units in service (000's) | ||||||||||||||||||||||||||||||||
1 to 100 units | 88 | 92 | 95 | 98 | 102 | 106 | 110 | 114 | ||||||||||||||||||||||||
101 to 1,000 units | 198 | 198 | 201 | 204 | 214 | 217 | 222 | 228 | ||||||||||||||||||||||||
>1,000 units | 744 | 759 | 767 | 784 | 775 | 788 | 792 | 802 | ||||||||||||||||||||||||
Total | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | 1,111 | 1,124 | 1,144 | ||||||||||||||||||||||||
Account size net loss rate(c) | ||||||||||||||||||||||||||||||||
1 to 100 units | (4.7 | )% | (3.6 | )% | (2.8 | )% | (3.7 | )% | (3.4 | )% | (3.9 | )% | (3.5 | )% | (4.0 | )% | ||||||||||||||||
101 to 1,000 units | (10.0 | )% | (1.1 | )% | (1.8 | )% | (4.5 | )% | (1.3 | )% | (2.3 | )% | (2.6 | )% | (4.0 | )% | ||||||||||||||||
>1,000 units | (1.9 | )% | (1.1 | )% | (2.2 | )% | 1.1 | % | (1.7 | )% | (0.5 | )% | (1.2 | )% | 0.6 | % | ||||||||||||||||
Total | (1.8 | )% | (1.3 | )% | (2.2 | )% | (0.4 | )% | (1.8 | )% | (1.2 | )% | (1.7 | )% | (0.8 | )% | ||||||||||||||||
Account size ARPU | ||||||||||||||||||||||||||||||||
1 to 100 units | $ | 12.13 | $ | 12.11 | $ | 12.23 | $ | 12.16 | $ | 12.22 | $ | 12.25 | $ | 12.34 | $ | 12.48 | ||||||||||||||||
101 to 1,000 units | 8.47 | 8.58 | 8.62 | 8.61 | 8.66 | 8.63 | 8.64 | 8.65 | ||||||||||||||||||||||||
>1,000 units | 6.65 | 6.59 | 6.59 | 6.64 | 6.64 | 6.67 | 6.68 | 6.75 | ||||||||||||||||||||||||
Total | $ | 7.47 | $ | 7.46 | $ | 7.48 | $ | 7.52 | $ | 7.56 | $ | 7.59 | $ | 7.63 | $ | 7.71 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
(b) Other includes hospitality, resort and indirect units. |
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(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service. | ||||||||||||||||||||||||||||||||
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RECONCILIATION FROM NET INCOME TO EBITDA (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Reconciliation of net income to EBITDA (b) (c): |
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Net (loss) income | $ | 511 | $ | (21,384 | ) | $ | 3,727 | $ | 1,498 | $ | 854 | $ | 3,026 | $ | 4,058 | $ | 3,451 | |||||||||||||||
Plus (less): Income tax expense | 475 | 24,920 | 171 | 1,155 | 620 | 1,876 | 2,123 | 2,334 | ||||||||||||||||||||||||
Plus (less): Other expense (income) | 47 | 282 | (359 | ) | (89 | ) | 30 | (100 | ) | (85 | ) | (104 | ) | |||||||||||||||||||
Less: Interest income | (283 | ) | (229 | ) | (214 | ) | (154 | ) | (122 | ) | (99 | ) | (67 | ) | (61 | ) | ||||||||||||||||
Operating income | 750 | 3,589 | 3,325 | 2,410 | 1,382 | 4,703 | 6,029 | 5,620 | ||||||||||||||||||||||||
Plus: depreciation, amortization and accretion | 2,713 | 2,774 | 2,775 | 2,851 | 3,223 | 3,176 | 3,229 | 3,235 | ||||||||||||||||||||||||
EBITDA (as defined by the Company) | 3,463 | 6,363 | 6,100 | 5,261 | 4,605 | 7,879 | 9,258 | 8,855 | ||||||||||||||||||||||||
Less: Purchases of property and equipment | (1,164 | ) | (2,179 | ) | (1,816 | ) | (2,353 | ) | (2,851 | ) | (1,878 | ) | (1,396 | ) | (1,537 | ) | ||||||||||||||||
Plus: Severance | (243 | ) | 53 | 51 | — | — | 1,438 | 12 | — | |||||||||||||||||||||||
Adjusted OCF (as defined by the Company) |
$ |
2,056 | $ | 4,237 | $ | 4,335 | $ | 2,908 | $ | 1,754 | $ | 7,439 | $ | 7,874 | $ | 7,318 | ||||||||||||||||
For the three |
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Reconciliation of EBITDA to EBITDA adjusted to exclude the adoption of ASC 606: | ||||||||||||||||||||||||||||||||
EBITDA (as defined by the Company) |
$ |
3,463 | ||||||||||||||||||||||||||||||
Less: Software revenue | (657 | ) | ||||||||||||||||||||||||||||||
Less: Cost of revenue | (17 | ) | ||||||||||||||||||||||||||||||
Plus: Selling and marketing | 461 | |||||||||||||||||||||||||||||||
Adjusted EBITDA(d) |
$ |
3,250 | ||||||||||||||||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
(b) EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only. | ||||||||||||||||||||||||||||||||
(c) EBITDA is the starting point for calculation of operating cash flow for purposes of the Company’s short term and long term incentive plans. Management and the Board of Directors also rely on EBITDA for purposes of determining the Company’s capital allocation policies. We define OCF as EBITDA less purchases of tangible assets and severance expense in determining whether management has achieved certain performance objectives for the year as set by our Board of Directors in awarding annual and long term incentive compensation to senior executives. | ||||||||||||||||||||||||||||||||
(d) Adjusted EBITDA represents EBITDA adjusted to exclude the adoption of ASC 606. Adjusted EBITDA is used by the Company for purposes of comparison to prior period results during its year of transition (2018) under the modified retrospective approach. | ||||||||||||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180425006676/en/
Al.Galgano@spok.com
Source: